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- Anupam Kumar 1
Unit 2: Sales PlanningOrganizing the Sales Force
PG – IVMarketing Specialization
- Anupam Kumar 2
Building Relationship
• Sales methods are changing to serve customers better
• Selling today often calls for a group effort • Sales teams include people from all
departments • Salespeople today must – Build trust with buyers – Work with other departments
- Anupam Kumar 3
Sales Organization - Need
• Organization is essential to accomplishing the organization’s goals
• Companies must – organize objectives – organize tasks – organize individual assignments – appoint a leader
- Anupam Kumar 4
Theories of Organization
Classical Theory• Jobs are divided into highly
specialized tasks.• Management coordinates
these tasks• Emphasizes on:
– Formal objectives– Hierarchy of authority
• Oriented towards efficiency not people.
Neo Classical Theory• Emphasis on humanizing
the organization• May under emphasize the
formal objectives, authority and control.
- Anupam Kumar 5
Modern Organization TheoryFormal
Organization Structure
Role & Status Pattern
Individual Informal Organization
Physical Setting
Organizational objective
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Individual System
PsychographicsSocial Factors
Demographics
The Individual
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The Informal Organisation
Behaviour Standard
Company Culture
Informal Organization
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Formal Organisation Structure
• Communication Channels
• Line of Authority– Delegation of Authority– Delegation of Responsibility
• Policies & Procedures
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The Physical Settings
Atmosphere Process &Devices
Physical Settings
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Role & Status Pattern
SocialStatus Groups
Role &Status
Pattern
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Sales Force Organisation
Guidelines to Good Organization• Division of Work
– Job Analysis– Job Description– Authorities– Responsibilities
• Span of Management– Chain of Command– Unity of Command– Unity of Direction
• Change– Planned and communicated– Flexibility and adaptability
Growth Dimensions• Passive infants to active adults• Dependence to independence• Few behaviour to many
behaviour• Shallow concerns to long term
concerns• Unconnected challenges to
long term integrated challenges
• Growing ambition• Impulsive to controlled
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Types of Sales Organization• The Line Organization
– Single Level– Multi Level
• The Line and Staff Organization– The Traditional Line & Staff Organization– The Functional Organization
• Organization by Specialization– Organization by Sales Activity– Geographical Area
• Product Organization– Product Manager Organization
• Customer Structure
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The Line Organization• It is simple in structure• It has clear line of authority• Inexpensive• Has high degree of accountability of the sales force• It is Good for small firms• Territories or Regions may be introduced.• The sales team persons have limited growth potential• System does not involved specialists and thus more suited for
simple products or services
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Line and Staff Organization
• Staff positions are introduced to support the sales head.
• It is more efficient as the sales head has specialists to assist him to take decisions
• Sales head maintains the same benefits of enjoying the line of command
• System is more expensive as compared to the line organization
• They may arise some conflict between the line and staff managers.
- Anupam Kumar 15
The Functional Organization
• It is a modification of the traditional line & staff organization
• The specialists have the authority on the sales force who can optimize the operations in their respective areas
• The sales person is responsible for more than one boss and the unity of command is broken
• May lead to a lot of potential conflict• It is not employed in large organizations
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Sales Strategies
MARKET PENETRATION
Same Product to Same CustomerAdd New Customer
MARKET DEVELOPMENT
Adapt Product for New Customers
DIVERSIFICATION
New Products & New Customers
PRODUCT DEVELOPMENT
New Product to Same Customer
OLD
NEW
OLD NEW
PRODUCT
C U S T O M E R
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Organizing by Sales Activity• Used with Market Penetration Strategy• Market is divided into 2 groups – Account Development &
Account Maintenance• Allows part of the sales team to bring new customers while
others maintain relationships• Beneficial in case of
– Fast acquisition of customers is required– High rate of customer turnover
• Customers may not be comfortable with the idea• Account acquisition team may have different motives.
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Geographical Areas• The market is divided into different territories or regions and all
sales person sell all products• Suited for organizations having large territories and
homogeneous product line• Sales person is closer to the market and can thus cultivate local
markets and solve local problems quickly• Customer has to deal with the same person, possibility of
developing relationships better• Proper supervision of sales force is possible involving lesser costs• Sales person remains generalist and the administration costs
tend to go up.
- Anupam Kumar 19
Product Organization
• Each sales person handles a product or product line
• Each product gets the salesperson’s attention• Suited for market development or
diversification strategies• However involves additional management and
overlapping territories leading to customer confusion
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Product Manager Organization
• Modification over the product organization where the sales force in the market remains the same.
• Each product line or product range is managed by a product manager which is a staff function
• Central control lies with the product managers• Sales team does not report to the product managers
for which they may lack control over team• Possibility of conflicts
- Anupam Kumar 21
Strategic Implications for Product or Product Manager Organizations
• Complex products• Dissimilar products• Different channels uses• Buyers vary by product• In-depth product knowledge required• Single salesperson cannot keep up technically
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Customer Structure – Account Management
• Customer structure is beneficial in case where– Sales team needs special knowledge to serve customers– Customers buys several products or from various product
lines– Same buying factor apply across product lines– Same buyers or influencers across product lines– Some buyers represent a large percentage of income for
the organization or need special attention
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Independent Representative• Advantages
– No up front costs or other provision for various benefits as the sales may be on straight commission basis
– No need for provision of other benefits
– The representatives share a good equity with the customers and thus may be good for new product introductions
– Representatives are specialists in their fields and know the products
• Disadvantage– Less control over the
independent representative– May provide less service to
the customer– May not provide accurate
market information– May carry competitor’s
product alongside– May not provide reports or
attend meetings
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Salesperson’s Expectations• Known quality product with some exclusive features• Product that represents good value and meets customer needs• Complete training• Training on obtaining a lead flow• Customer financing• Quality delivery and distribution• Company reputation for fair dealing and control over all
employees to prevent unfair or undesirable practices• Fair Compensation• Marketable product – Conceptually, Legally & Ethically
- Anupam Kumar 25
New Trends
• Just in time• Customer relationship management (CRM)• Computer based materials planning• Improved buying proficiencies• Sale force automation• Increase complexities• Face to face selling time is shrinking
To Sales Hiring Process…
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